Schwieterman: Falling corn values help feeder futures

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Corn                                     Estimated Fund Position
Trends – March Contract
Short Term:Down                 Net Long Futures and Options: -174263
Long Term: Down                 Change: -6000
Overnight Trade: H -4 @7:30 AM


The persistent talk of the Chinese rejecting US corn due to GMO issues is keeping pressure on the market. The March contract has relieved the overbought condition and is testing the recent lows. This is where we find out how bearish the export situation really is and if the trading funds want to add short positions in the face of the Index funds adding long positions in a few weeks. Don’t panic until we see a close below $4.18.

Wheat                                   Estimated Fund Position
Trends – March Contract
Short Term: Down                 Net Long Futures and Options: -107496
Long Term: Down                  Change: -1500
Overnight Trade: Chicago: H -4 KC: H -2 @7:30 AM


The wheat market is ugly. Our export sales haven’t been horrible, but the fear is that the big crops in Canada and Australia will slow our export sales and keep our stocks levels from shrinking. On the weekly chart we there aren’t many support points to go on except for $6.50 and $6.00, so this market needs some good news very soon. The best news out there right now is that the Paris wheat is trying to mount a recovery. Strength in Europe would be supportive.

Soybeans                               Estimated Fund Position
Trends – January Contract
Short Term: Up                      Net Long Futures and Options: 129672
Long Term:Up                        Change: +3000
Overnight Trade: F -5 @7:30 AM


The soybeans ended up posting a solid close Friday, but didn’t have any follow through buying overnight. Traders are on the lookout for fresh Chinese demand and the NOPA crush report could be supportive today if it shows a record crush level, which is expected. There is trend line support at the $13.15 area in the January contract and a test of that is likely if we don’t see the friendly demand news.

Live Cattle
Trend
Short Term: Down
Long Term: Down
Opening Calls: 10-30 Lower


Live cattle futures closed moderately lower on Friday, with lower cash and cutouts the culprits. The struggling cutout values have put a damper on the recent bullish ideas. The arctic cold temps projected for the week of Christmas seem to be tempering, which may allow for better conversion over the coming weeks. Look for show lists to be steady to slightly larger after moderate cash sales on Friday. The next two weeks will be short kills, with Christmas and New Years Day falling on Wednesdays.

Feeder Cattle
Trends
Short Term: Up
Long Term: Up
Opening Call: Mixed


Feeder cattle futures closed mixed on Friday but January finished 2.50 higher for the week. Weakness in the corn market has added another leg to the cash trade and is giving a boost to the futures carts. Corn is off another 3-4 cents in overnight trade, which should help support the feeder opening against struggling fundamentals in the fat market. Moderating temps may actually add to feeder demand as cattlemen are more likely to place cattle under improved weather conditions.



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